1.1 SRM were formed in the year 2000 by
merging two companies, Solrec and CMR under the ownership of Heidelberg
Cement. The traditional business of Solrec and CMR has been continued
and expanded in the new company, SRM.

1.2 SRM recycle in excess of 150,000 tonnes
of hazardous waste a year in four main business areas, namely
recovery of solvents by distillation, manufacture of Secondary
Liquid Fuels (SLF) for cement kilns, manufacture of processed
solid fuel for cement kilns (Profuel) and manufacture of raw material
substitute from waste for use in cement manufacture.

1.3 As a significant operator in the management
of these industrial waste streams SRM welcomes the opportunity
to comment on issues within the terms of reference of this inquiry.

1.4 Solvents and organic chemical waste
streams in general make up the majority of hazardous waste currently
processed by SRM. In full accordance with the Waste Hierarchy
each waste stream is first evaluated for its potential for recycling.
In the industry this process is generally referred to as recovery,
hence "solvent recovery". Should a waste stream be non-recyclable
for technical or economic reasons, SRM process the materials into
Secondary Liquid Fuel (SLF) for thermal recovery in cement or
lime kilns.

1.5 Cement is a vital bulk commodity product,
which, by its very nature, requires large volumes of both raw
materials and energy. Our objective is to develop ways and means
of substituting the use of prime raw materials and fuel with materials
derived from waste sources, particularly wastes currently being
landfilled or incinerated. A cement kiln is proven technology
as a valuable jigsaw piece in waste management strategy for the
UK and SRM welcome the interest of the EFRA committee and hope
this will help the reuse of waste raw materials for thermal recovery
or material recovery.

1.6 Within the terms of reference of the
enquiry, we would like to comment on the impact on hazardous waste
disposal, of past changes in legislation governing landfill and
the steps taken by the Government to prepare for the implementation
of the Incineration of Hazardous Waste Directive. We would also
wish to comment on plans for the implementation of Integrated
Pollution Prevention and Control Directive (IPPC) and the Landfill
Directive.

2. THE HAZARDOUS
WASTE INCINERATION
DIRECTIVE (HWID)

2.1 The implementation of this Directive,
as it affects our business, was correctly completed and secondary
liquid fuel is now burned as a hazardous waste in cement kilns,
which conform to the Directive as a co-incineration plant.

2.2 As part of the implementation, it was
necessary to determine whether or not SLF was a recovered fuel
that falls outside the definition of the Directive or a hazardous
waste, to be treated under the terms of the Directive.

2.3 A Judicial Review between Castle Cement
and the Environment Agency in 2001 determined this issue.

2.4 The judgement concluded that despite
extensive processing of hazardous wastes to make SLF, the finished
SLF remained a hazardous waste and the processing operations were
not a "Recovery Operation". SLF burned at a cement kiln
remains a hazardous waste and the recovery is not complete until
the waste is incinerated. The burning of the waste is thus the
"recovery operation".

2.5 One consequence of this determination
is that Recovered Fuel Oil (RFO) is also a waste, its components
were waste and, as with SLF, it is not possible to change it to
a fuel by processing operations. Recovery of waste oil is only
complete at the point of combustion and the release of energy.

2.6 The Environment Agency and DEFRA have
been aware of this anomalous treatment of RFO, which is still
classed as a fuel and stored, transported and used as such, despite
the findings of the Judicial Review.

2.7 Lack of clarity as to the future classification
of RFO causes difficulties in planning for the future management
and recycling of waste oils. Most European countries now class
RFO as a hazardous waste.

2.8 SRM would welcome official clarification
regarding the status of RFO, to allow the Waste Management Industry
to formulate a sustainable plan for its future management,particularly
in the light of the forthcoming Waste Incineration Directive which
may make current use impossible. We don't want a repeat of the
fridge mountain problem.

2.9 A further issue has arisen as a direct
result of the implementation of the HWID on Secondary Liquid Fuels.
The UK government's financial incentives appear to be lagging
behind in this area, in a manner, which currently creates a distortion
contrary to the objectives of the government's Waste Strategy
and the EC Waste Hierarchy.

2.10 The government's financial incentives
from the view of a producer of SLF, which is classed as a hazardous
liquid waste, are as follows: SLF to disposal (landfill) incurs
the Landfill Tax at £13 per tonne. SLF to disposal (incineration)
incurs no tax, levy or duty. SLF to thermal recovery (cement kiln)
incurs a duty of 2.74 p/l equating on average to £26.70 /
tonne of hydrocarbon oil content. Bearing in mind that SRM produce
SLF from waste streams which are not viable for our recycling
operations these three options are the only available routes.
SRM recommend that H.M. Customs and Excise should accept that
SLF is a hazardous waste being incinerated and that applying the
same fuel duty as commercial Gas Oil is not appropriate and runs
counter to the governments aims particularly Carbon Dioxide reduction
targets. These financial arrangements force waste down the hierarchy
not up,this cannot be UK Government policy.

The diagram below visualises the current situation.

2.11 The enforcement of the Hazardous Waste
Incineration Directive on cement kilns authorised to burn SLF
has enforced the current European Waste Catalogue (Council Decision
94/904/EC) (EWC List) for this industry sector.

2.12 Enforcement of the EWC List on this
specific industry sector from July 2000, possibly as much as three
years before the EWC List is enforced throughout the waste industry
sector as a whole or as part of the planned Special Waste Regulations
Review (Hazardous Waste Regulations) has created some difficulties.

2.13 All cement kilns using SLF have a legally
enforced "Acceptable Waste List", which defines which
EWC waste categories can be burnt as constituents of SLF. Despite
its legal status, this list lacks major definitions. As an example
there is no UK, or for that matter even European definition as
to what constitutes "aqueous". Category 140102 "other
solvents and solvent mixes" "other" meaning non-halogenated
solvents) is permitted, 140105 "aqueous solvent mixes free
of halogens" is not permitted. Without knowing when a solvent
mix is to be classed as an "aqueous" solvent mix it
is obviously extremely difficult for the parties involved to demonstrate
compliance. This particular issue has been addressed by the industry
suggesting a minimum calorific value threshold to the Environment
Agency and self-policing itself to these limits.

2.14 Clear definitions for the individual
categories in the EWC List are required prior to further enforcement
to prevent recurrences of companies being left in a legal "grey
area" and to prevent regional inconsistencies in the enforcement
of the EWC List.

2.15 On a similar note, the co-existence
of numerous waste classification schemes (EWC List, Draft UK Waste
List, generic descriptions, chemical categories etc.) is making
particularly thermal recovery operations unnecessarily complex.
It is not uncommon for waste to be delivered to a transfer site
and classified according to its permitted waste list. The waste
could then be passed on to operators such as SRM and may have
to be re-classified for compliance with this sites' permitted
waste categorisation scheme. For compliance with the cement kiln's
EWC List the waste has then to be reclassified again.

2.16 The issue of severe regulatory restrictions
on the SLF thermal recovery route by having both a tight chemical
specification on SLF and a further limitation of an acceptable
waste list is discussed under the heading of the Landfill Directive.

3. THE INTEGRATED
POLLUTION PREVENTIONAND CONTROL
DIRECTIVE (IPPC)

3.1 SRM operate four IPC authorised sites
and one Waste Management Licensed site. As SRM's core business
activity is to divert waste materials away from disposal operations
and up the Waste Hierarchy, be it to thermal recovery or all the
way to recycling and re-sale, SRM's operations are very much focussed
on the recovery of waste.

3.2 The main issue currently facing the
SLF blending industry in the UK is that the regulatory bodies
have yet to decide which IPPC sector SLF blending will fall under.
At present there appears to be a danger that the solvent recovery
route of SLF manufacture will be reclassified as a disposal operation
(Section 5.3).

3.3 As explained above, SRM's core activity
is to recycle and recover waste streams, avoiding disposal wherever
possible. SLF blending is not considered a disposal operation.
This is reflected in the fact that SLF blending is currently classed
as a recovery operation (R13 pending R1). To have one of the main
SRM operations re-classed as a disposal operation for the reason
that there is no obvious category under Section 5.4 "Recovery
of Waste" would appear to go against the intentions of the
IPPC regulations.

3.4 In summary, for the SLF blending industry
in the UK the implementation of the IPPC Directive is currently
stuck at the first hurdle: defining a suitable IPPC section category.

3.5 SRM recommend that an urgent resolution
to the above situation is required.

4. THE LANDFILL
DIRECTIVE

4.1 SRM fully support the governments' commitment
to redress the UK's current imbalance in waste management with
a view to reduce the landfilling of certain wastes.

4.2 For a number of waste streams from liquids
through to certain solids, thermal recovery as a fuel or material
recovery as an alternative to raw materials in a cement or lime
kiln would be an optimum solution. These routes would be environmentally
beneficial to a disposal operation as expanded on in section 1,
the introduction. The routes are existent, fully authorised and
regulated, with a nationwide infrastructure in place.

4.3 SLF manufacture is tightly regulated
by a stipulation of chemical and physical parameters and thresholds
as well as a list of waste materials to be excluded from the manufacture
of SLF. This already tight regulation has, with the enforcement
of the HWID been further added to by a list of allowable waste
categories permissible for inclusion into SLF. The industry is
therefore now regulated by:

 chemical and physical specification
of SLF to ensure no harm to the environment from burning SLF

 list of wastes not permissible for
inclusion into SLF

 list of wastes permissible for inclusion
into SLF

4.4 SRM believe it is questionable what
environmental benefits are to be achieved by this recent addition
for the following reasons. Particular waste streams, which must
be excluded per se, such as radioactive wastes for example, already
are excluded. Any other waste inputs are regulated by the requirement
of having to achieve the final specification, for example for
parameters such as heavy metals or halogens. In addition, as expanded
in paragraph 2.13 the EWC list this permissible waste list is
based on lacks major definitions and is therefore difficult to
implement.

4.5 The permissible waste list was collated
mainly on the basis of what is currently included in the manufacture
of SLF.

4.6 Whilst SRM could play a further role
in diverting waste streams from landfill and offer alternative
routes for materials soon to be banned under the Landfill Directive
the current list of permissible waste categories poses a significant
hindrance. Waste streams that could technically and environmentally
be included into SLF once the market conditions are more favourable
to thermal recovery, are excluded by virtue of the list of permissible
wastes.

4.7 In order for the waste recovery industry
to cope with the increase of wastes soon to be diverted from landfill
under the Landfill Directive, the industry needs to be given the
flexibility to recover all waste materials which it can safely
and correctly process. For the SLF blending industry the current
regulation of listing each waste stream that may be handled by
a recovery site and having based this largely on what is being
handled at present, leaves this particular industry with little
or no flexibility to ease the implementation of the Landfill Directive.

5.0 FURTHER INFORMATION

5.1 SRM are willing to provide the committee
with further expanded written submissions on any of the above
topics if required. SRM have previously hosted a site tour of
our operations prior to the 1996 Environment Committee on the
Environmental Impact of Cement Manufacture,we have an open door
policy with regard to our activities and would welcome the EFRA
committee to any of our operating sites.